Rouble continues resurgence on US stimulus hopes, but geopolitical risks remain

MOSCOW: The rouble firmed towards a one-week high against the dollar on Thursday, gaining along with other emerging currencies on the prospect of US fiscal stimulus, even as geopolitical pressures lingered for Russian assets.

By 0725 GMT, the rouble was 0.5pc stronger against the dollar at 77.27 and had gained 0.4pc to trade at 90.73 versus the euro.

The rouble rebounded on Wednesday, gaining almost 2pc against the greenback as part of a correction after a sustained period of negative pressure.

Geopolitical risks, including the prospect of more sanctions against Moscow, have plagued the rouble in the past few weeks due to turmoil in neighbouring Belarus, the suspected poisoning of Kremlin critic Alexei Navalny and military conflict in the South Caucasus.

"Geopolitics is capable of containing the Russian market and the rouble, but it seems that previous fears were all exaggerated," said Andrei Kochetkov, a leading analyst at Otkritie Brokerage.

Risk appetite surged on hopes of US COVID-19 relief legislation, boosting the rouble.

The rouble also received support from the central bank beginning additional foreign currency sales on Thursday.

Brent crude oil, a global benchmark for Russia's main export, was down 0.3pc at $42.18 a barrel.

However, risk appetite remained under pressure on concerns of a prolonged resurgence in COVID-19 cases triggering new, extended lockdowns that curtail fuel demand, BCS Global Markets warned in a note.

Russia plans to double state borrowing on the domestic market in the fourth quarter to compensate for a budget shortfall amid lower oil prices and the coronavirus pandemic.

Russian stock indexes were falling.

The dollar-denominated RTS index was down 0.5pc , at 1,184.3 points.

The rouble-based MOEX Russian index was 0.1pc lower at 2,903.1 points.